Analyzing Client Dependence in Dyadic IS Outsourcing Relationships

Dependence on an IT supplier is a well-known risk for client companies in IS outsourcing. However, little research efforts have been made to compare both exchange partners’ dependencies in an IS outsourcing setting. This contradicts with traditional dependence research which views this concept as a property of a relation and not as an attribute of an organization. A case study of five IS outsourcing relationships provides insights into un-/balanced and joint dependencies in a dyad. To explain variances in client dependence, the dependence construct is broken down into its constituting facets. Besides an information system’s importance and supplier’s substitutability, spillover effects emerged as an unanticipated third determinant. Originating from other exchange relationships with the IT supplier, these effects can distort the dependence structure in the focal relationship.

[1]  Wynne W. Chin,et al.  Information systems outsourcing relationship factors: detailed conceptualization and initial evidence , 2005, DATB.

[2]  Line Dubé,et al.  Rigor in Information Systems Positivist Case Research: Current Practices , 2003, MIS Q..

[3]  Peter Buxmann,et al.  Toward a Dynamic View on Client Dependence in IS Outsourcing Relationships: A Qualitative System Dynamics Approach , 2012 .

[4]  Joseph W. Rottman.  Successful knowledge transfer within offshore supplier networks: a case study exploring social capital in strategic alliances , 2008, J. Inf. Technol..

[5]  H. Arkes,et al.  The Psychology of Sunk Cost , 1985 .

[6]  Jan-Benedict E. M. Steenkamp,et al.  The Effects of Trust and Interdependence on Relationship Commitment , 1996 .

[7]  O. Williamson.  Comparative Economic Organization: The Analysis of Discrete Structural Alternatives , 1994 .

[8]  Tiziana Casciaro,et al.  Power Imbalance, Mutual Dependence, and Constraint Absorption: A Closer Look at Resource Dependence Theory , 2005 .

[9]  John D. Sterman,et al.  System Dynamics: Systems Thinking and Modeling for a Complex World , 2002 .

[10]  David L. Mothersbaugh,et al.  Why customers stay: measuring the underlying dimensions of services switching costs and managing their differential strategic outcomes , 2002 .

[11]  Marjolein C. J. Caniëls,et al.  Purchasing strategies in the Kraljic matrix—A power and dependence perspective , 2005 .

[12]  Shankar Ganesan.  Determinants of Long-Term Orientation in Buyer-Seller Relationships , 1994 .

[13]  H. Kelley,et al.  The social psychology of groups , 1960 .

[14]  R. Coase.  The Nature of the Firm , 1937 .

[15]  W. E. Black,et al.  Book Review: From the Peddler's Cart … the Lifeline of America: Development of the Food Industry , 1965 .

[16]  Allen M. Weiss,et al.  Converting from Independent to Employee Salesforces: The Role of Perceived Switching Costs , 1992 .

[17]  Matthew B. Miles,et al.  Qualitative Data Analysis: An Expanded Sourcebook , 1994 .

[18]  Kenneth L. Kraemer,et al.  Review: Information Technology and Organizational Performance: An Integrative Model of IT Business Value , 2004, MIS Q..

[19]  Glen Whyte,et al.  The role of asset specificity in the vertical integration decision , 1994 .

[20]  J. Steenkamp,et al.  The Effects of Perceived Interdependence on Dealer Attitudes , 1995 .

[21]  R. Emerson.  Power-Dependence Relations , 1962, Power in Modern Societies.

[22]  Anselm L. Strauss,et al.  Basics of qualitative research : techniques and procedures for developing grounded theory , 1998 .

[23]  Varun Grover,et al.  The Effect of Service Quality and Partnership on the Outsourcing of Information Systems Functions , 1996, J. Manag. Inf. Syst..

[24]  Ilan Oshri,et al.  Can Client Firms Achieve Radical Innovation in IT Outsourcing? , 2011, ICIS.

[25]  R. Yin.  Case Study Research: Design and Methods , 1984 .

[26]  Gary L. Frazier.  On the Measurement of Interfirm Power in Channels of Distribution , 1983 .

[27]  Robin L. Wakefield,et al.  Measuring switching costs in IT outsourcing services , 2006, J. Strateg. Inf. Syst..

[28]  K. Eisenhardt.  Building theories from case study research , 1989, STUDI ORGANIZZATIVI.

[29]  J. Sterman.  Business Dynamics , 2000 .

[30]  Jan B. Heide,et al.  The Role of Dependence Balancing in Safeguarding Transaction-Specific Assets in Conventional Channels , 1988 .

[31]  Robert W. Palmatier,et al.  A Comparative Longitudinal Analysis of Theoretical Perspectives of Interorganizational Relationship Performance , 2007 .

[32]  Louis W. Stern,et al.  Power Measurement in the Distribution Channel , 1972 .

[33]  Peter Buxmann,et al.  Organizational design of IT supplier relationship management: a multiple case study of five client companies , 2012, J. Inf. Technol..

[34]  Leslie P. Willcocks,et al.  A review of the IT outsourcing literature: Insights for practice , 2009, J. Strateg. Inf. Syst..

[35]  José L. Gascó,et al.  Information systems outsourcing risks: a study of large firms , 2005, Ind. Manag. Data Syst..

[36]  Robert N. Stern,et al.  The External Control of Organizations: A Resource Dependence Perspective. , 1979 .

[37]  M. Keil,et al.  The effects of sunk cost and project completion on information technology project escalation , 1995 .

[38]  R. Gulati,et al.  Dependence Asymmetry and Joint Dependence in Interorganizational Relationships: Effects of Embeddedness on a Manufacturer's Performance in Procurement Relationships , 2007 .

[39]  D. Bourantas,et al.  Avoiding dependence on suppliers and distributors , 1989 .

[40]  Thomas Hess,et al.  Sunk Cost and Target Achievement Biases in Subsequent IS-Outsourcing Decisions , 2010, ECIS.

[41]  O. Williamson.  The Economics of Organization: The Transaction Cost Approach , 1981, American Journal of Sociology.

[42]  Leslie P. Willcocks,et al.  Exploring information technology outsourcing relationships: theory and practice , 2000, J. Strateg. Inf. Syst..

[43]  Peter B. Seddon,et al.  Assessing and managing the benefits of enterprise systems: the business manager's perspective , 2002, Inf. Syst. J..

[44]  Juliet M. Corbin,et al.  Basics of Qualitative Research (3rd ed.): Techniques and Procedures for Developing Grounded Theory , 2008 .

[45]  L. Scheer,et al.  The effects of supplier capabilities on industrial customers’ loyalty: the role of dependence , 2010 .

[46]  James A. Narus,et al.  A Model of the Distributor's Perspective of Distributor-Manufacturer Working Relationships , 1984 .

[47]  D. Jacobs,et al.  Dependency and Vulnerability: An Exchange Approach to the Control of Organizations. , 1974 .

[48]  Leslie P. Willcocks,et al.  Analysing four types of IT sourcing decisions in the context of scale, client/supplier interdependency and risk mitigation , 1998, Inf. Syst. J..

[49]  Rudy Hirschheim,et al.  Foreword to the special issue on IS sourcing , 2008, Inf. Syst. Frontiers.

[50]  Kenneth L. Kraemer,et al.  Executives’ Perceptions of the Business Value of Information Technology: A Process-Oriented Approach , 2000, J. Manag. Inf. Syst..